Choice Hotels to Put $40 Million into its Biggest Brand

Choice Hotels International, Inc. announced a landmark $40 million property improvement incentive program to build on the success of the ongoing system-wide refresh strategy of its more than 1,900 domestic Comfort Inn and Comfort Suites hotels launched last year. The Comfort Re-Imagined brand strategy has been making great strides.

Committed to gaining even more ground, Choice Hotels, one of the world's largest hotel companies, introduced this incentive to encourage hotels to perform their renovations quickly and completely.

This is yet another dynamic component of the brand's sweeping multi-year, multi-faceted approach to provide greater consistency of quality across the company's biggest brand and ongoing increases in guest satisfaction.

From the opening session of the company's annual convention in Los Angeles, Choice Hotels International President and Chief Executive Officer Stephen P. Joyce unveiled the $40 million commitment to franchisees of the company's domestic Comfort Inn and Comfort Suites branded hotels.

With nearly 2,500 Comfort Inn and Comfort Suites properties worldwide, this represents one of the largest single brands in the hospitality industry and one of the largest system-wide upgrades.   

All qualifying domestic Comfort branded properties can apply for a piece of the $40 million, which will be awarded through a forgivable promissory note. Through the promissory note structure, after a fixed amount of time, hotels receiving incentive funds will not owe anything back to Choice Hotels so long as they have not defaulted under the Franchise Agreement.

To ensure timely implementation, all incentive eligible work must be completed on or before Sept 30, 2014. The company will pay out incentive funds after Property Improvement Plans (PIPs) have been completed and verified through property inspections and submitted invoices.

While the incentive works through the existing PIP process, even hotels without a current PIP can request one and be eligible for the incentive. Once the improvements are made, franchisees will be able to submit for up to 50% of cost of eligible items for reimbursement.

The new incentive program builds on the Comfort brands' Truly Yours brand positioning, which was formally launched through the Comfort Re-Imagined strategy in 2012. The Re-Imagined strategy has been driving a surge in guest satisfaction.

The incentive program is concentrated on guest-facing, capital intensive items such as carpet, furniture, and mattresses. Where possible, the program requires the implementation of the Truly Yours design package.

Development of the Truly Yours Design Package was based on in-depth feedback from more than 1,500 guests and developers. Consumer research already indicates overall intent to stay at Comfort hotels nearly doubles in response to the new look. Research also indicates guests are willing to pay more on average per night compared with the current design.

Changes to the free Your Morning Breakfast program, which was a major feature of the first phase of the refresh, were made in response to the comments of more than 10,000 respondents.

Guest response has been overwhelmingly favorable of breakfast enhancements that are now available at most hotels - which include the addition of a flavored waffle - and the new design concept's warm and inviting look. As part of the Comfort Re-Imagined strategy, hotels have also added 154,000 new flat panel TVs, served 25 million waffles last year and are in the process of rolling out one million new pillows and 230,000 refreshed beds.

As part of its commitment to drive consistency and quality across the Comfort brand, last year, Choice Hotels announced tougher penalty fees for franchisees found not in compliance with their PIPs. Further, raising the bar on the guest experience, franchisees of Comfort branded properties now face an even higher required guest satisfaction score.